Where's the carrot?

I attended the Sagesessions event held at the iconic and world-class Sage Gateshead theatre. The day brought together 500 Sage clients, partners and team members to be educated with inspiration, innovation and insight, in the concert venue that Sage has been a lead sponsor of since it opened in 2004.

Sage is still the only tech company that sits on the FTSE 100 and is quite rightly proud of its growth from North East England startup to global player employing over 13,000. Despite this success, it’s fair to say that its Accountant Division has not had the most positive relationship with UK Accountants since its inception in 2000, after a buying spree that saw it acquire five competing software compliance houses.

Innovation

Sage announced the “Practice Cloud” that John Stokdyk, Editor, Accounting Web has been searching for. In a slick forty-five minute demo, Chris Baber-Davies ran through a complete cloud-based offering for an accountancy firm; bookkeeping, Accounts Production, Corporation Tax and Personal Tax. Sage One will be rebranded to Sage Accounting. 

Sage One has a complete rewrite and the key features focussed on during the presentation were; a complete overhaul of the User Interface, batch entry, bank feeds, easy conversion from Line 50.

As it was only a forty-five minute demo, there was no time to look at the compliance tools in any detail, short of showing them on the screen to prove that they exist.

Accountex in May will see the launch, but a beta program is underway.

Insights

Panel discussions involving clients educated third parties and Sage Product marketing team members were held to discuss MTD and GDPR and whilst these sessions are now an accepted part of a vendor partner day, the quality of discussion is dictated by the panellists. MTD gave us a very justified and entertaining grilling of the HMRC representative.

All stick and no carrots.

GDPR was made very interesting by great insight by Asam Malik of PwC and proved that many in the room still have a lot of learning to complete and action plans to make.

John Stokdyk shared the secrets of successful firms in the last five years of the Accounting Web Practice Excellence awards. Digital, content marketing and blogs being key themes, but to some surprise, limited use of marketing apps.

Inspiration

Merynn Somerset Webb gave a great talk on economic indicators and made the subject of Japanese cement production interesting.

So where does all of this leave Sage in the accountancy practice software world? In terms of the compliance world, they have stolen a march on competition to deliver the three core compliance products. Of course, more nimble players Nomisma and Capium are the first providers to have complete cloud offerings for a smaller accountancy firm.

The launch at Accountex will be eagerly awaited for greater depth and understanding on the functionality available for accountants.

Stephen Kelly confidently announced that Gartner states that Sage now has an 18-month leadership position with its Business Cloud offering. This is the end user software product.

It’s interesting to see that Sage announce their Gartner stated leadership position with a degree of realism and none of the Kool-aid that alternative solutions would do. Stephen Kelly, the CEO, is an incredibly sharp and successful businessman, but for a business in Sage’s position, to achieve this recognition, should have been repeated more often than it was on the day.

Instead, we had Adrian Sproston apologising for lack of communication with customers. Well after 18 years in the sector, you should have been aware of it before. Every Sage user I have ever spoken too, complains about this issue. Jane Mitchinson delivered impressive figures on customer success, but easy to deliver growth, when the starting point is low. Personally, I’m always annoyed when businesses start “obsessing about the customer” in public roadshows. In an organisation with high recurring revenues, what have you been doing before?

Of course, as an enterprise business, it’s difficult to force change through and Mr Kelly has made many significant changes; people and product, since arriving in November 2014. He also has investors to please, as Sage is a listed business and he has done that since his arrival.

Clawing back lost market share in the Accountants Division – I’m sceptical that Sage can deliver in both compliance and bookkeeping marketplaces. They have suffered a lot of reputational damage and are clearly perceived in a poor light by many accountants. At Accountex 2016, Sage invested significantly in a double-decker bus exhibition stand, announced a new product(s) and what followed – very little.

Reputations take a long time to build with accountants and even longer to recover.

Stephen Kelly runs a big, global business and his challenge is that he needs to be a Stephen Kelly to run the Accountants Division. Does it have its own leader? Sage’s strength is its weakness. Big enough to consult with government, but so what. How does that affect me in provincial UK? It’s constant churn of people either leaving the business or onto the next job role after two year’s in post, as is the rule in the enterprise world, but it does not help continuity at the top of the Accountants Division.

From a personal perspective, I feel that the Sage client base are very conservative and “late adopters”, when it comes to making IT decisions. This will help Sage in the “cloud wars”, as many of its clients will only now be starting their digital journey. It also showed in a very impressively run event, in that panel discussions were backwards looking – “How can I avoid MTD”, as opposed to “how can I adapt too and make a success of MTD”

It’s great to see the charity work that Sage delivers, particularly in the North East, it’s great they are big enough to consult and advise government, but all business want is up to date software, that works “out the box” and is well supported. Sage is back in the boxing ring and fighting, but it remains to be seen if it turns into an Anthony Joshua like renaissance or a Richard Dawson like defeat.  Sage has had moments when it looked promising before e.g. Accountex 2015 and the double-decker bus stand but failed to follow up. It remains to be seen if this time is any different – or it just buys IRIS!

I have worked in the accountancy software sector since May 1996. I worked at IRIS ( 1996 – 2006) and Thomson Reuters Digita (2008 – 2011). Since working for myself, 2011, I have consulted with Nomisma and PANALITIX, amongst working with several firms directly.